After failing to pass their TrumpCare bill through the Senate, Republicans in both the House and Senate are turning to “tax reform.”
Here’s the first thing to know: this is not going to be true tax reform. Calling it “tax reform” suggests they intend to close corporate loopholes or address the growing wealth inequality that the current tax code fuels. But that’s not what Republicans have in mind.
Instead, they want tax cuts for the wealthy and corporations paid for by taking away Medicare, Medicaid, and education funding. Since they want to pass their tax cut plan through the Senate with only 51 votes, they have to follow the rules of reconciliation. One of the rules is that the legislation can’t add to the deficit after ten years—meaning that, in order to make their tax cuts for the wealthy permanent, they intend to make deep cuts to entitlements to offset them.
“Tax Reform” = taking from working families to give massive tax cuts to the rich.
Trump’s tax plan is a giveaway to corporations, at the expense of working families. Corporate profits are at record levels, while workers’ wages have stagnated. Rather than helping those left behind, as the Trump administration claims, the tax plan would reduce the corporate tax rate from 35 to 15 percent. More than half the benefits from this cut would flow to the top 1 percent of households. Contrary to Trump’s rhetoric about bringing jobs back to America, the plan would eliminate taxes on the foreign profits of U.S. corporations, giving them a major incentive to move more jobs and profits offshore.
The plan would also eliminate the alternative minimum tax, which is intended to ensure that the wealthy pay at least some taxes, no matter how many loopholes they exploit. According to his 2005 tax return, Trump paid $38 million in taxes on $153 million in income; $31 million of his tax payment was due to the alternative minimum tax. Had it not been in place, his effective tax rate for that year would have been just 3.5 percent—far below what most middle-class families pay.
Trump’s tax plan would eliminate the estate tax—delivering a huge windfall to billionaires like Donald Trump’s family. Say it with us: the estate tax only applies to estates worth over $5.5 million. That means 99.8 percent of estates (the property someone leaves when they die) are already exempt from the estate tax, and the Republican tax plan would only help the remaining wealthiest 0.2 percent of estates. Simply put, this is a way to keep wealth concentrated in the hands of a small number of billionaire families, much like how Trump generated his own fortune.
Republicans are pivoting to their tax plan right after recess—and they think they can trick you into supporting it.
Congress thinks they can score an easy win right after recess pushing “tax reform.” Who doesn’t like a tax cut, right? The problem is, their tax cuts are geared almost exclusively for the wealthy and corporations, leaving the middle class falling further behind with barely a token reduction in their taxes—just enough to trick you into falling for it. For example, under Trump’s tax plan, the middle class would see a 1.5% tax cut—but the wealthy would get a 14.1% tax cut.
This tax cut plan is the next big legislative fight in Congress. In fact, one of the reasons Republicans spent so much time trying to get TrumpCare through is that doing so would have made it easier for Congress to make even steeper tax cuts. We stopped TrumpCare, and now it’s time to stop these tax cuts for the wealthy and corporations paid for by taking away Medicare, Medicaid, and education. Here are some sample town hall questions you can use during August recess.
Sample Town Hall Questions
For Republicans and Democrats
- I don’t believe that cutting taxes for the rich will do anything for the economy, except to make the rich richer. I’ve paid taxes my whole life and think that you, as my Representative, should be prioritizing me and my family, not the wealthy. Will you commit to me, your constituent, that you will oppose any new tax cuts for the rich?
- Few corporations actually pay their fair share in taxes. Many pay none at all. It’s unfair that many rich corporations are paying less in taxes than people like me. Even Donald Trump is bragging about how corporate profits have never been higher. If that’s true, then why do they need a huge tax cut? Will you commit to me, your constituent, that you will oppose any tax plan that cuts taxes for corporations or leaves corporate tax loopholes in place?
- I am worried that Trump’s tax plan, and the one I have seen from House Speaker Paul Ryan, would increase the deficit by trillions of dollars. And since Republicans in the Senate want to pass the bill through reconciliation, they’ll have to offset these huge tax cuts for the wealthy and corporations with cuts to Medicare and Medicaid in order to make them permanent. Will you commit to me, your constituent, that you will oppose any tax plan that jeopardizes Medicare and Medicaid to pay for tax cuts for the wealthy and corporations?
- Without his tax returns, the American people have no way of knowing how much tax cuts will benefit Trump and his businesses. The taxpayers deserve to know if our hard-earned money is going to the President’s personal gain. Will you oppose any tax cuts until President Trump release his tax returns so that the American people can fully understand how it will personally benefit him and his businesses?